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Knowledge Base

Drawdown Trailing Stop Loss

Overview


Alan Hull's Drawdown Trailing Stop tool trails behind the most recent highest closing price by a given percentage (20% by default). Every time a rising trend makes a higher closing price then the drawdown stop loss will increase to maintain the 20% buffer. The trailing stop is prevented from going lower when the price activity falls, but once the stop loss has been breached for several consecutive number of bars (10 by default) then it will reset to the drawdown percentage below the closing price of the 10th bar.


To add the tool to your chart, select the tool from the Hull tool group, and left-click on the chart or indicator on which you wish to add the tool. Optuma will then draw the tool using the default settings.

Scripting Function: DRAWDOWNSTOP()

To scan for when the 10% drawdown / 5 bar reset ratchets up after a move higher:

V1 = DRAWDOWNSTOP(DRAWDOWN=10, RESETBARS=5);
V1 IsUp

Actions & Properties


Actions


Copy Data to Clipboard: Will copy the tool's values to the clipboard which can then be inserted into a spreadsheet, for example, allowing for further analysis.

Add Technical Alert: When selected, a Technical Alert will be created for the selected security.

Add to Toolbar: Adds the selected tool to your custom toolbar.

Apply Settings to All: When multiple Drawdown Trailing Stop Loss tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Drawdown Trailing Stop Loss tools in the chart, page or entire workbook to be updated instantly.

Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.

Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.

Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.

Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.

Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Drawdown Trailing Stop Loss to a chart, the tool will display using the new settings.

Delete: Deletes the tool from the chart.

Properties


Tool Name: Allows you to adjust the name of the tool, as it's displayed in the Structures Panel.

Drawdown (%): Sets the percentage used in the trailing stop.

Reset Bars: This sets the number of bars closing below the trailing stop required to reset the trailing stop. By default, the tool requires 10 closes below before the tool is reset.

Calc Using: The trailing stop is calculated off the recent highest close by default. Use this option to select another high, eg based on highest high.

Plot Style: Change from Line to Dot or Step.

Line Style: Allows you to change the line from Solid to Dashed or Stippled.

Line Width: Adjust the Line Width.

Colour Scheme: Single Colour, Copy Chart Colours, or create custom colour scheme using scripting.

Line Colour: Change the colour of the line.

Offset: Moves the tool forward or backwards in time. The offset is measured in bars, so a value of 2 will push the tool forward 2 bars and -2 will move the tool back 2 bars.

Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.

Visible: Un-tick this checkbox to hide the tool from the chart.

Show In Price Scale: When selected the current value will be displayed in the Price Scale.

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